Tuesday, April 17, 2018
Lance Compa (Cornell ILR) sends us word of a report describing the "wrong turn" taken by an arbitration panel in the first-ever case decided under the labor chapter of a free trade agreement. The case involves worker's rights violations in Guatemala. Here's a press release describing the case and a report critical of the case co-authored by Lance:
A new report from the International Labor Rights Forum (ILRF) says that an arbitral panel’s ruling in the first case ever decided under the labor chapter of a free trade agreement “got it wrong” on workers’ rights violations in Guatemala. Written by three prominent international labor law experts, “Wrong Turn” edits down the 300-page decision into a reader-friendly 30 pages, and provides analysis and commentary at key points showing the arbitral panel’s flawed approach and conclusions.
Following a 2008 complaint by the AFL-CIO and a coalition of Guatemalan unions, the United States government initiated the arbitration case in 2011 under the labor rights chapter of the 2005 U.S.-Central America Free Trade Agreement (CAFTA). That chapter defines as its central purpose to “protect, enhance, and enforce basic workers’ rights.” The United States charged Guatemala with failing to effectively enforce its national labor law to halt mass firings of workers who try to form unions and to remedy minimum wage, health and safety, and other violations of employment standards. Effective enforcement of national law is a central obligation of the CAFTA labor chapter.
In their report, Lance Compa of Cornell University, Jeff Vogt of the Solidarity Center, and Eric Gottwald of ILRF note that two of the three members of the arbitral panel were prominent trade lawyers who normally represent multinational companies in commercial disputes, but have no labor experience or expertise. As a result, “The decision is based on a narrow, trade-oriented analysis divorced from labor law reality - particularly in a developing country like Guatemala.”
Importantly, the arbitral panel did find that Guatemala repeatedly failed to effectively enforce its labor law. However, the panel found that such failures did not occur “in a manner affecting trade,” as required by the labor chapter, leading the arbitrators to rule in favor of Guatemala. In contrast, the report’s authors argue that, “A rights-focused analysis would say the CAFTA labor chapter is meant to protect workers’ fundamental rights, not competition in the free trade area.”
Gottwald, Vogt and Compa suggest that the arbitral panel erected an impossibly high barrier to workers prevailing in such cases. All violations and the failure to enforce labor laws occurred in trade-related sectors such as apparel manufacturing, agriculture, and shipping, but the panel found that this was insufficient to meet the “manner affecting trade” requirement. The arbitrators demanded evidence that companies took advantage of the government’s enforcement failures to gain a price advantage in the marketplace. But such information, argue the report authors, is impossible to obtain without subpoena power – a tool that is not available in the CAFTA dispute resolution system.
The authors also decry the failure of the U.S. government to present evidence on widespread violence against trade unionists in Guatemala, including death threats and assassinations – an important part of the unions’ original 2008 complaint. Reflecting this failure, they note that “In the full 299-page decision of the Panel, not once does the word ‘violence’ appear.”
The ILRF report concludes with recommendations to address the “wrong turn” in the CAFTA arbitration decision. They include requiring arbitrators to be experts in labor law and labor relations and to consider reports and decisions from international human rights bodies, not just the WTO, in their decision-making process; allowing trade unions and victimized workers to participate in arbitration proceedings, correcting the interpretation of the “manner affecting trade” clause, and making the labor chapter of all trade agreements a human rights chapter.
Here is the full report.
Saturday, October 14, 2017
Over at Indisputably, Sarah Cole has a great post about the Fifth Circuit's rejection of a preliminary injunction by the NFL Players' association that would have prevented the suspension of Cowboy running back Zeke Elliott. As Sarah points out, the arbitration clause that the NFL and the Players' Association agreed to is bizarre, but the Players' Association must follow the procedure it agreed to before challenging the outcome in court.
In other news, an unfair labor practice charge has been filed against the Cowboys (and owner Jerry Jones) for threatening to bench players who kneel during the national anthem to protest race discrimination and violence. As Ben Sachs points out over at onlabor, this is a possible ULP for interfering with the players' protected concerted activity under the NLRA. In a separate onlabor post, Noah Zatz makes a convincing case that any benching would violate the opposition clause of Title VII's anti-retaliation provision.
Wednesday, September 27, 2017
Consistent with Imre's post below, Alex Colvin (Cornell ILR) provides this news of his own study:
In a nice conjunction with the D.R. Horton cases arguments coming up, I also have a report out today on the use of mandatory employment arbitration clauses, as well as the incidence of class action waivers. The study was sponsored by the Economic Policy Institute (EPI).
This is a nationally representative, establishment-level survey of 628 employers. It allows me to get a measure of the percentage of employees covered by mandatory arbitration. The key take-away is that I find that 56.2 percent of private sector nonunion employees are covered by mandatory arbitration. Of the employees covered by mandatory arbitration, 41.1 percent have class action waivers in the procedures.
Although the methodology is different, there is some nice consistency between the results of Imre’s study and mine. His focus is on the Fortune 100 companies, where my reading is that he finds 80 use mandatory arbitration for some workers using a broad measure or 66 using a narrower measure. In some additional analysis of my survey results, I found that larger employers were more likely to use mandatory arbitration, with 65.1 percent of employers with 1000 or more employees having mandatory arbitration procedures. Our numbers are also generally consistent with regard to the proportion of mandatory arbitration procedures that include class action waivers. So my take-away is that the two studies' results reinforce the validity of each other’s findings.
In anticipation of the D.R. Horton cases to be argued next week, I am publishing a report about the use of arbitration clauses for workplace-related disputes. The key finding from my study, which is based solely on publicly-available data, shows that 80 of the Fortune 100 companies, the largest companies in America by revenue, have used arbitration agreements for workplace-related disputes since 2010, and almost half of these 80 have class waivers.
My study is limited in scope; I was just trying to get a better sense of the possible impact of the D.R. Horton cases and capture a snapshot of the use of arbitration clauses in the workplace among the top companies in America.
Here’s an early link to the study, which will go live tomorrow through the Employee Rights Advocacy Institute, of which I serve as a board member:
I hope these limited findings may be of some value and provide some context for the ongoing debates about the use of arbitration. I know I sound like a broken record sometimes, but I firmly believe the Federal Arbitration Act (FAA) was never intended to cover employment disputes. Based on the original purpose, history, and text of the FAA – and if the Supreme Court were writing on a clean slate, there should be no debate that the employees would win the D.R. Horton cases. Unfortunately, the Supreme Court has long abandoned any analysis of the history and text of the FAA. To paraphrase Justice O’Connor, the FAA as interpreted today is now solely a creation of the Supreme Court’s own imagination. I hope I am pleasantly surprised in a few months when the decisions are issued. However, if the Court rules in favor of the employees, it would be the first time in decades that the Supreme Court has significantly cut back on its expansive interpretations of the FAA. My bet is that the employers win, and the Court will unfortunately continue chipping away at our ability to access the judiciary.
Monday, June 19, 2017
Over at On Labor, Vivian Dong describes the switch:
[T]he Department of Justice announced last Friday that it will switch over its support in the upcoming Supreme Court case, NLRB v. Murphy Oil, from the National Labor Relations Board to Murphy Oil. The issue in the case, set for the 2017 October term, is whether arbitration agreements with individual employees that ban employees from pursuing employment claims on a class or collective basis (class action waivers) violate the NLRA. Under President Obama, the DOJ wrote an amicus brief in support of the NLRB, which had ruled that such arbitration agreements did indeed violate the NLRA. But, as the DOJ states in its re-filed brief, “after the change in administration, the office reconsidered the issue and has reached the opposite conclusion.” The DOJ now argues that “nothing in the NLRA’s legislative history indicates that Congress intended to bar enforcement of arbitration agreements like those at issue here.” NLRB v. Murphy Oil was consolidated with Epic Systems Corp. v. Lewis (the 7th Circuit opinion that caused the circuit split), and Ernst & Young LLP v. Morris—all three cases received significant attention when their opinions were issued. Whatever the outcome, the case will be a landmark case for employment law.
Saturday, June 17, 2017
Congratulations to Steve Ware (Kansas) and Ariana Levinson (Louisville) on the publication of their new book Principles of Arbitration Law (Concise Hornbook Series, available July 2017). Here's the publisher's description:
The Concise Hornbook Principles of Arbitration Law is an authoritative and extensively cited treatise on arbitration. It thoroughly discusses general arbitration law―from federal preemption of state law to the formation, performance, and enforcement of arbitration agreements―and provides in-depth coverage of specialized law governing international arbitration and labor arbitration. The last few decades have witnessed the growth of a large body of legal doctrine―from statutes, judicial decisions, and other sources―focused on arbitration. This Concise Hornbook summarizes that body of law, so should be useful to lawyers and scholars researching arbitration law and to students learning about arbitration.
I haven't yet received a copy of the book, but know from reviewing the draft of the labor law chapter that it will be top-flight.
Friday, June 2, 2017
Congratulations to Rafael Gely (Missouri-Columbia), who just received the David Petersen Award from the National Academy of Arbitrators. In addition to all his labor/employment work, Rafael directs Missouri-Columbia's Center for the Study of Dispute Resolution. He also is the founder of Workplace Prof Blog -- he created the blog and then handed it off to me way back when he was at Cincinnati. Here’s the announcement of the award, which is extremely well deserved:
The National Academy of Arbitrators conferred upon Rafael Gely the David Petersen Award at its annual meeting in Chicago, Illinois. The David Petersen Award recognizes and honors individuals who have given invaluable service to the Academy.
The Academy conferred the Petersen Award because of Professor Gely’s instrumental role in the startup and continual maintenance of arbitrationinfo.com, the neutral website which is a joint venture of the National Academy of Arbitrators and the University of Missouri School of Law. Through Professor Gely’s work as an editor of the site, he has written content on a regular basis, designed and updated the site, supervised student assistants, and crucially connected with journals both before and after articles are written. The Academy notes the creation of the website provided a source of information and education regarding arbitration for journalists, professionals, and the public. The Academy believes that the website has immeasurably improved the discourse and understanding of labor and employment arbitration in both United States and Canada.
Sunday, May 21, 2017
Michael Green has been burning the midnight scholarship oil recently. He has posted two articles to SSRN in the last month: The Audacity of Protecting Racist Speech under the National Labor Relations Act, forthcoming 2017 U. Chicago Legal Forum, and Can NFL Players Obtain Judicial Review of Arbitration Decisions on the Merits When a Typical Hourly Union Worker Cannot Obtain This Unusual Court Access?, forthcoming NYU J. Legislation and Public Policy. He also has a forthcoming paper in SMU Law Review on Racial Prejudice in ADR in the Workplace (SSRN post coming soon). Congrats, Michael!
Sunday, February 12, 2017
Aaron Halegua (NYU) writes to give us the heads-up on a free, downloadable book by the ILO: Resolving Individual Labour Disputes: A Comparative Overview. Here's the ILO's description of the book:
The number of individual disputes arising from day-to-day workers’ grievances or complaints continues to grow in many parts of the world. The chapters in this book cover individual labour dispute settlement systems in Australia, Canada, France, Germany, Japan, Spain, Sweden, the United Kingdom and the United States.
Each chapter examines and assesses the institutions and mechanisms for settlement of individual labour disputes, including the procedures and powers available, the interaction of these institutions and mechanisms with other labour market institutions (e.g. collective bargaining and labour inspection) and the broader system for resolution of legal disputes (e.g. courts of general jurisdiction, specialist commissions and tribunals).
And here's Aaron's description of the chapter he wrote on the U.S.:
I contributed a chapter on the United States, which I think provides a good overview of the role played by administrative agencies (USDOL, EEOC, NLRB, New York State DOL, NYS Division of Human Rights, etc.), federal and state courts, firm's internal efforts, and both labor and employment arbitration -- as well as how ADR is used in all those contexts. It also seeks to evaluate each one and pulls together statistics on the performance of each institution. I think that people already familiar with the United States might find the evaluation/statistics part and use of ADR in these institutions useful. I also think it would be particularly useful for people trying to understand our complex system with its web of overlapping institutions, or professors ... who might be teaching such students.
Thursday, November 3, 2016
Dennis Nolan and Rick Bales have just published the new edition of their book, Labor and Employment Arbitration in a Nutshell (West, 3d ed.). The publisher's description:
Labor and employment arbitration law simplified. Authoritative coverage provides a description of the origin, development, and practice of labor and employment arbitration. Text focuses on the fundamentals of the labor and employment arbitration process and explores the major arbitration law issues, their importance, and the conflicting opinions on them.
A must have if your studying or working in this area.
Wednesday, August 3, 2016
A petard was a primitive bomb used to breach a wall. A bell-shaped iron casing would be filled with gunpowder and then affixed to the wall; a soldier would light the fuse, and the casing would direct the force of the blast toward the wall. Apparently, petards often exploded before the soldier could run away, hoisting (lifting) the soldier in the blast. Thus, the phrase "to hoist with his own petard" (Hamlet) means "to be harmed by one's plan to harm someone else".
That's an apt description for what seems to be happening now to many companies that have adopted consumer-arbitration clauses coupled with class-action waivers. A former student, now working at a large defense firm, describes how it's happening. Take a claim that's only marginally colorable and at face value worth only a few dollars, and file for arbitration. AAA rules impose on the company a $3400 arbitration fee plus attorneys fees. Settle for $3k. Repeat ad infinitum, thanks to the class-action bar contained in the company's arbitration clause. Company gets hoisted on its own petard.
Dennis Nolan and Marty Malin predicted several years back that something like this would happen, but this is the first report from the field I've heard. Dennis points out that companies may try work-arounds -- they might stop settling (which would force the hands of plaintiff mills, but wouldn't work on cases with claims that are low-dollar but at least colorably meritorious) or they might find an arbitral service provider cheaper than AAA (but courts might be reluctant to enforce arbitration clauses specifying arbitral service providers with close ties to the company -- see Hooters v. Phillips).
Monday, July 25, 2016
Christine O'Brien (Boston College - Management) has just posted on SSRN her article (forthcoming 19 U. Pa. J. Bus. L. ___) Will the Supreme Court Agree with the NLRB that Pre-Dispute Employment Arbitration Provisions Containing Class and Collective Action Waivers in Both Judicial and Arbitral Forums Violate the National Labor Relations Act – Whether There is an Opt-Out or Not? Here's the abstract:
Should employers be able to require individual employees to sign away their rights to collective action as a condition of employment? The National Labor Relations Board has held in D.R. Horton and Murphy Oil USA that when employers require employees to waive their right to “joint, class, or collective claims addressing wages, hours, or other working conditions against the employer in any forum, arbitral or judicial” as a condition of employment, this violates the NLRA. Even allowing prospective employees to opt out of such class waivers does not cure the violation in the NLRB’s view according to its decision in On Assignment Staffing Services. A circuit split has developed on enforcement of the Board’s orders on the class waiver issue with the Fifth Circuit denying the NLRB enforcement, the Seventh affirming the Board, and the Eight Circuit joining the Fifth. There are several appellate cases pending before the Ninth Circuit which has yet to fully develop its stance and approximately sixty class waiver cases pending on appeal. The Supreme Court will likely be faced with deciding one of these appeals soon. This article discusses the NLRB’s and courts’ positions from several recent cases involving class waivers in individual employment dispute agreements. It suggests how the courts and the Supreme Court should rule as well as the possibility of legislative action.
Monday, May 30, 2016
Admittedly, this title is somewhat hyperbolic, but hope beats eternal and last week the Seventh Circuit created a circuit split on the Horton question, which I've addressed before on this blog and in a co-authored article with Tim Glynn. And, full disclosure -- the two of us are among the signatories of an amicus brief before several courts of appeal.
Lewis v. Epic is well worth the read, but the Readers Digest version is that the court refused to enforce an agreement that precluded pursuit of class claims in either arbitration or court. The basis was the National Labor Relations Act's protection of workers' concerted actions for mutual aid and protection and its concomitant invalidation of agreements purporting to restrict that right. The prohibition of collective procedures in the arbitral tribunal "runs straight into the teeth of Section 7."
Nor did the FAA change that result. Epic argued that "even if the NLRA killed off the collective action waiver, the FAA resuscitates it," but the court didn't agree. Given that a court should try to reconcile potentially competing statutes, Epic faced a heavy burden in finding the FAA to trump the NLRB. Indeed, given the FAA's savings clause, which requires enforcing any contract "save upon such grounds as exist at law or in equity for the revocation of any contract," Judge Wood found no conflict at all between the two enactments.
Epic was circulated to the full Seventh Circuit, and no judge indicated a desire for en banc review. In normal circumstances, that would mean a petition for certiorari, but it seems unlikely than an understaffed Supreme Court will take the case. Presumably, the issue will continue to play out in the circuits that have not addressed the issue. In the meantime, however, the case has cast an epic uncertainty over waivers of collective or class relief in arbitration agreements.
Tuesday, May 17, 2016
Stacie Strong (Missouri) just sent an email to the ADR listserv describing an international labor/arbitration case. I'm reprinting here (with permission) the description of the case from her email:
A very interesting case, Suazo v. NCL (Bahamas), Ltd., was recently handed down by the U.S. Court of Appeals for the Eleventh Circuit. The case involved a cruise ship employee who was injured on the job and whose employment contract contained an arbitration agreement governed by the New York Convention and Chapter 2 of the Federal Arbitration Act. The question was whether the employee could bar arbitration by showing that high costs may prevent him from effectively vindicating his federal statutory rights in the arbitral forum.
The matter came up as part of a motion to compel arbitration, and the court held that "Our New York Convention precedent suggests (but does not hold) that a party may only raise this type of public-policy defense in opposition to a motion to enforce an arbitral award after arbitration has taken place, and not in order to defeat a motion to compel arbitration." This approach is, of course, problematic if one concludes that it will be difficult if not impossible to vindicate one's rights initially if one cannot afford to pursue the claim (here the court decided that the claimant had not made the appropriate showing, so the court was able to take a "no harm, no foul" perspective). However, the decision appears correct under the New York Convention.
Some might say that the advent of third party funding and availability of contingent fee attorneys in the United States would allow worthy claimants to assert their claims, but there is no guarantee that a third party funder or contingent fee attorney will take any particular case. While it is unclear how often this type of scenario will arise in the future, the case does identify a significant area of tension between domestic law and international law.
Saturday, May 14, 2016
The NY Times today described the increasing use of arbitration clauses for Silicon Valley and other similar start-up firms. This issue is nothing new to readers of this post, but it perhaps shows that even Silicon Valley isn't immune from broader workplace trends (although they certainly put a nicer spin on it). As always, the devil is likely in the details. Workers represented by experienced unions tend to fare well under arbitration systems, while individual employees--or those trying to form class actions--are far less likely to see the benefits of one-sided arbitration agreements. As the article notes, the Consumer Financial Protection Bureau is seeking new rules for commercial arbitration, but aside from the NLRB, there seems little that agencies are doing for employees.
Tuesday, April 26, 2016
Lisa Gelernter (SUNY-Buffalo, and a Bills fan) writes to share her take on the Second Circuit’s decision upholding the four-game suspension of Tom Brady of the Patriots for the deflate-gate scandal. [Side note: all the NFL's footballs are manufactured right here in Ada, Ohio -- come visit the factory, and ONU Law School, some time!]
I've cut-and-pasted Lisa's comments here:
The [Second Circuit] overturned the district court’s vacatur of what the parties (including the union) all characterized as an arbitrator’s award. The “arbitrator” in the case was NFL Commissioner Roger Goodell, who under the clear language of the collective bargaining agreement, was allowed to appoint himself as the hearing officer reviewing his decision to suspend Brady.
The Second Circuit’s opinion was totally consistent with the Supreme Court’s doctrine on the limited judicial review available for arbitration awards. The twist in this case is that the arbitrator was not a neutral party – Goodell was reviewing his own decision. The Second Circuit said that since the CBA specifically provided for this unusual review process, the court had to adhere to what the parties had agreed to. Although that seems right in the collective bargaining context when both parties are on somewhat equal footing in terms of bargaining power, hopefully that reasoning will not be carried over into consumer and employment arbitrations where the individual consumer or employee may not realize that he or she is “agreeing” to a partial arbitrator. After all, the Supreme Court has said that the reason that the FAA allows for enforcement of arbitration agreements is to allow for an alternative to litigation in court, which presumes some minimal level of procedural fairness and neutrality.
Tuesday, April 5, 2016
I had the pleasure of seeing Ted St. Antoine (Michigan - emeritus and former dean) speak at today's Ohio State Journal on Dispute Resolution's Schwartz Lecture on Dispute Resolution. His topic was Labor and Employment Arbitration Today: A Midlife Crisis or a New Golden Age? OSU Dean Alan Michaels gave an eloquent and heartfelt introduction in which he aptly praised Ted for mentoring and nurturing several generations of labor scholars and practitioners (and, true to form, Ted spent much of his lecture praising the empirical work of Alex Colvin).
I still have a handwritten note Ted sent me, when I was still in practice, congratulating me on my first publication. Ted is a terrific role model, and it was a special pleasure to see him again today.
Sunday, March 6, 2016
Since I tend to be foolishly optimistic, I've been wondering for a while (without actually putting in the effort to research the point) whether there's a silver lining to the current tendency to shuttle discrimination complaints to arbitration -- the possible inapplicability of statutory time limitations on bringing suits. Of course, Title VII doesn't have a traditional statute of limitations at all (i.e., a period measured from the accrual of the cause of action to the filing of a complaint in court), but rather has two separate temporal requirements that must be satisfied -- one (usually 300 days) for filing a charge with the EEOC and a second (90 days) for filing suit after receipt of a right to sue letter.
Under one paradigm (arbitrator subs in for the court to decide a case as a court would) the answer would be yes, but under another (arbitration is an alternative dispute resolution system subject to its own rules) the answer might be no. Plus, not only is the statutory language concerning pursuit of claims framed in terms of filing a "civil action" (which was not enough for the Court to find arbitration superseded) but arguably this whole structure is designed to filter disputes through a judicial process. That might mean that the procedural requirements are simply inapposite when arbitration is the dispute resolution procedure, which in turn might mean no statute of limitations at all for arbitration (the arbitrator could apply something like laches), and maybe no requirement at all of filing a charge with the EEOC.
Obviously, any movement along these lines would be employee-friendly, although it wouldn't address some of the serious problems of mandatory arbitration, including the typical clauses that foreclosing class claims in both court and arbitration.
The question came to mind in light of a case decided by the Second Circuit last August. The decision, Anthony v. Affiliated Computer Services, is less than definitive both because it is nonprecedential and because it arose in the context of an attack on an arbitration award. The arbitrator had found the plaintiff's claim under various antidiscrimination statutes barred by his failure to file for arbitration within 90 days of receipt of the EEOC's right to sue letter, and the Second Circuit upheld the award as not exceeding the arbitrator's authority. Less than a ringing endorsement of the decision and suggestive of the possibility that the court might also have upheld an award based on exactly the opposite reasoning.
But Anthony does raise the issue of what the right answer should be for arbitrators who are faced with this question.
Of course, silver linings in nature are transitory, and, even if arbitrators were to hold statutory procedures inapplicable in arbitration, employers are likely to add their own limitations periods to arbitration awards and, given the Supreme Court's sweeping readings of the FAA, those are likely to be upheld under current law.
Wednesday, February 24, 2016
Rafaeol Gely (Missouri-Columbia) writes to announce the launch of ArbitrationInfo.com. Here's a description:
The Center for the Study of Dispute Resolution at the University of Missouri School of Law (CSDR) is delighted to announce the launching of ArbitrationInfo.com. In 2014, faculty at the CSDR and the National Academy of Arbitrators (NAA) began conversations about a possible collaboration on a website that would provide information about labor arbitration. Leadership of the NAA, founded in 1947 as a nonprofit honorary and professional organization of arbitrators in the United States and Canada, was concerned about the manner in which labor arbitration and the arbitration process were being portrayed in the media. With the expansion of the use of arbitration outside the labor area, particularly in consumer and employment disputes, negative descriptions of the process in the media had reached an alarming level. While some of the criticism in these other areas was, and continues to be justified, the NAA feared that such criticism could have a delegitimizing effect with regard to labor arbitration. Our initial conversations led us to believe that in part some of the press that arbitration was receiving was due to misunderstandings and misinformation about the different contexts in which arbitration was used and the various types of arbitration.
The website addresses these concerns by providing the public, professionals and the media with a neutral, noncommercial and comprehensive source of information about arbitration. It includes an Arbitration 101 page, which serves as a primer on the arbitration process. In addition, the site features a list of press contacts who are available to talk to members of the media about arbitration. The website is managed by an editorial board composed of members of the NAA and faculty at the CSDR. Students at the School of Law have the opportunity to develop content for and help maintain the website, in collaboration with distinguished members of the NAA. Unlike other arbitration-related websites, ArbitrationInfo.com doesn’t generate or funnel business to a particular arbitrator or an arbitration practice group.
Saturday, February 20, 2016
A recent article in The Economist, The big fight, notes that European companies are far ahead of American companies in developing dispute esolution systems for consumer disputes, especially in online ADR. I think a good case can be made that SCOTUS's pro-arbitration line of cases -- especially those that all but extinguish consumer class actions -- have removed the incentive for American companies to invest in developing effective dispute-resolution programs. As a result, American companies risk falling yet farther behind their European competitors.
Here's some key language from the article in The Economist:
The more consumer-friendly stance [of European companies] did not just evolve in the courts but was to a large degree the result of a decision y the European Commission more than 20 years ago to make all small print subject to being examined and potentially overturned by the courts.... The most recent [directive] gives a shot in the arm to ADR, by for instance forcing businesses to inform consumers of their dispute-resolution options.... Firms won't be forced to sign up to an ADR scheme, but eh hope is that most will feel obliged to as the directive takes hold.
Europe also leads the way in developing online mechanisms for mediating the millions of cross-border e-commerce disputes that arise each year.